Credit Code Red

Australia has been the lucky country for a long time. First it rode off the sheep's back. Then it became a quarry for emerging economies. It deregulated its financial sector, abandoned manufacturing, rode an apparently endless urban-land boom, and has gone more than 25 years without a recession. But is Australia's luck about to run out?Brain and Manning, two of the country's highly experienced economic analysts, argue that Australia's prosperity has been bought by borrowing from its future—specifically, by borrowing too much, for the wrong assets, and from the wrong lenders. Using international and local indicators to measure economic danger signs, they warn that, if current policies are not altered, the country will be at extreme risk of an economic calamity. Due to Australia's high and increasing levels of household debt, foreign debt, and low foreign-exchange reserves, the country will enter what they call a Code Red zone...